Municipals get boost from Treasuries rally; Alachua County Health brings $300 million of bonds

By Sheri Kasprzak

New York, Oct. 1 – Municipals felt the ripple effect of a Treasuries rally Wednesday as investors headed toward safe-haven investments, traders said.

Yields were lower by 3 basis points to 4 bps with intermediate bonds seeing the most movement, said a trader in the afternoon. Even so, munis far underperformed Treasuries, which saw yields plummet by 9 bps to 10 bps after Germany sold 10-year notes at a 0.90% yield, the first time the county has ever sold the notes at a yield under 1%.

Meanwhile, the market continued to await a $1.1 billion offering from the Texas Transportation Commission. Pricing of the bonds will begin Thursday.

Alachua health bonds price

Leading Wednesday’s somewhat lighter primary action was a $300 million deal from the Alachua County Health Facilities Authority of Florida. The authority sold $300 million of series 2014 health facilities revenue bonds for the Shands Teaching Hospital and Clinics.

The deal included $250 million of series 2014A bonds and $50 million of series 2014B bonds, said a pricing sheet.

The 2014A bonds are due 2025 to 2027 and 2033 to 2036 with a term bond due in 2044. The serial bonds have 5% coupons. The 2044 bonds have a 4% coupon that priced at 97.431 and a 5% coupon that priced at 108.503.

The 2014B bonds are due Dec. 1, 2034, have a 5% coupon and priced at 110.787.

The bonds were sold through senior manager BofA Merrill Lynch.

Proceeds will be used to finance capital improvements, including a new cardiovascular and neuromedicine tower at the UF Health Shands Hospital in Gainesville.

California DWR bonds steady

The California Department of Water Resources’ series AS Central Valley Project water system revenue bonds saw a great deal of interest in secondary on Wednesday.

The bonds, although very actively traded, were unchanged from Tuesday’s pricing levels.

Forty-two trades of the 5% 2025s were reported Wednesday, but the yield remained at 2.32% after trading between 2.32% and 2.352%.

There were 44 trades of the 5% 2028s on the day, with the bonds trading between 2.5% and 2.613%. The bonds ended the day at 2.58%, the same as Tuesday’s pricing.

The bonds (Aa1/AAA/) were sold through senior managers Morgan Stanley & Co. LLC and Ramirez & Co. Inc.

The bonds are due 2018 to 2032 with 2% to 5% coupons.

Proceeds will be used to refund the department’s series AE through AN revenue bonds.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.